Starting in June Repay Holdings Corp. (RPAY) began trading in a sideways range and a rectangle pattern has formed.
RPAY is engaged in providing integrated payment processing solutions to verticals that have transaction processing needs. It allows customers to pay through Mobile App, Text, Interactive Voice Response, Virtual Terminal, Hosted Payment Page and Online Customer Portal among others.
The company has been benefiting from the switch to e-commerce which has been a boon to the digital payments industry. RPAY offers a suite of software and services for lenders and business transaction processors where there isn’t a lot of competition.
RPAY reported earnings yesterday and outperformed analyst estimates in both earnings and revenues. In particular, card payment volume was $3.8 billion, an increase of 44% year over year, and total revenue was up 43% year over year.
At the end of the quarter, the company had $182.3 million in cash and cash equivalents, compared with $251.3 million in long-term debt. Its total current assets of $203.4 million greatly outweighed its current liabilities of $56.3 million though.
The stock is a bit overvalued with a Price to Sales ratio of 7.37 and a forward P/E of 55.56. The company has shown strong short- and long-term momentum. It is currently rated “Neutral” by our POWR Ratings system.
Take a look at the 1-year chart of RPAY below with added notations:
Chart of RPAY provided by TradingView
After a persistent spring rally, RPAY moved into a sideways trading range. While in the range, the stock has formed a resistance level at $28 (red), and a level of support at around $22 (green). At some point, RPAY will have to either break the resistance or the support.
The possible long positions on the stock would be on a breakout above $28. The ideal short opportunity would be on a break below $22.
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RPAY shares were trading at $24.49 per share on Tuesday morning, down $2.00 (-7.55%). Year-to-date, RPAY has gained 67.17%, versus a 11.24% rise in the benchmark S&P 500 index during the same period.
About the Author: Christian Tharp, CMT
Christian is an expert stock market coach at the Adam Mesh Trading Group who has mentored more than 4,000 traders and investors. He is a professional technical analyst that is a certified Chartered Market Technician (CMT), which is a designation awarded by the CMT Association. Christian is also the author of the daily online newsletter Todays Big Stock. More...
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